What is an employer to do when it discovers that one of their employees has been arrested? In many cases, the employer’s knee-jerk reaction will be to dismiss the employee, particularly where the charges relate to more unsavoury conduct. However, the law is clear that like most off-duty conduct, being charged with a criminal offence will not, in and of itself, be just cause for dismissal.

This issue recently arose in the case of Merritt v. Tigercat Industries, decided by the Ontario Superior Court of Justice. In that case, Mr. Merritt was a 67-year-old labourer that had been employed by Tigercat since 1998. The evidence revealed that over the course of his employment, there were four disciplinary events, though there was some dispute with respect to whether Mr. Merritt received notice of the discipline in each case.

In any event, in February 2015, Mr. Merritt was arrested at one of the employer’s facilities and charged with two counts of sexual assault against minors. A representative of the company met with Mr. Merritt the following day, but Mr. Merritt refused to discuss the charges. He was then presented with a letter of resignation, but refused to sign. The evidence was that Mr. Merritt then took a two week leave of absence, following which he returned to work. An unidentified female employee allegedly raised concerns about seeing Mr. Merritt back in the workplace, and he was dismissed. According to an affidavit filed by a representative of the company:

I advised the plaintiff that he was being terminated for cause based on his conduct, including but not limited to, his failure to tell me the whole truth, the extensive warnings and suspensions he had received for his past conduct, and the impact his criminal charges had on Tigercat Industries in general and on his fellow employees.”

No investigation was conducted prior to dismissal. Not surprisingly, Mr. Merritt sued, and then brought a motion for summary judgment.

To begin with, the court confirmed that

criminal charges alone, for matters outside of employment, cannot constitute just cause. Improper conduct of an employee while not at work can only form grounds for termination with cause in limited situations. There must be a justifiable connection to the employer or the nature of employment. (emphasis added)

The court also referenced the case of Millhaven Fibers Ltd. v. Oil, Chemical & Atomic Workers Int’l Union, Local 9–670, a leading case which addressed discipline for off-duty conduct and noted as follows:

In other words, if the discharge is to be sustained on the basis of a justifiable reason arising out of conduct away from the place of work, there is an onus on the company to show that:

the conduct of the grievor harms the company’s reputation or product

the grievor’s behaviour renders the employee unable to perform his duties satisfactorily

the grievor’s behaviour leads to refusal, reluctance or inability of the other employees to work with him

the grievor has been guilty of a serious breach of the Criminal Code and thus rendering his conduct injurious to the general reputation of the company and its employees

places difficulty in the way of the company properly carrying out its function of efficiently managing its works and efficiently directing its working forces.

The court rejected the company’s arguments that just cause for dismissal existed, minimizing the “concern” expressed regarding the impact on potential employees, particularly in light of the fact that Mr. Merritt was allowed to return to his position after a two-week leave of absence. As I often advise employers, if you are going to take the position that someone’s conduct was so egregious that it has irreparably harmed the employment relationship, rendering you unable to employ the individual, you must dismiss them immediately and not continue to allow them to work. Otherwise, your position will lack credibility.

The company also took the position that Mr. Merritt was dishonest when confronted with the criminal allegations. The court rejected this, finding that there was a criminal investigation ongoing, that Mr. Merritt was entitled to the presumption of innocence and the right to silence, and that “an employee cannot be compelled to discuss the criminal allegations as any disclosure to an employer could easily be forwarded to the police.”

Ultimately, just cause for dismissal was not found to exist in the circumstances. The case is a warning to employers not to react in haste and, even when an employee is charged with unsavoury criminal acts, to remember that until the employee is convicted, the charges are mere allegations and may not constitute just cause for dismissal.

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Stuart Rudner is a leading HR Lawyer, mediator and a founding partner of Rudner Law, a firm specializing in Canadian Employment Law. At Rudner Law, their approach is simple. They want to understand your circumstances, your concerns, and your goals. They will then ensure that you understand the legal regime along with your rights and obligations. Once that is done, they work with you to design a cost-effective strategy that meets your needs. They want to be your trusted advisor.Read more